Brazilian plastics film producer Polo Films is investing nearly $100 million to expand its biaxially oriented polypropylene film capacity and to build a new plant to make biaxially oriented polyester films.
Polo is spending $50 million to install a third Bruckner Maschinenbau GmbH stretching line at its main plant in Montenegro, Brazil, in mid-2006. This will take capacity at the facility from 110 million to 176 million pounds of BOPP film per year.
Soaring market demand, growth in new products and substitution of nonplastic packaging prompted the firm to bring forward this project, which was originally scheduled for next year. Bruckner confirmed it is supplying a 27-foot-wide, five-layer stretching line with a speed of 1,558 feet per minute.
Sao Bernardo do Campo, Brazil-based Polo, which runs a second film plant with a 26 million-pound-per-year blown film capacity in Varginha, Brazil, aims to raise its overall BOPP output to 220 million pounds per year by 2008.
Recently, the company announced plans to diversify its flexible packaging product lines with a $40 million investment in a new PET films unit. A final board decision must still be made as to the plant's location, but Polo expects it to start in early 2008.
The PET films will be aimed mainly at food packaging, where PET's thermal resistance and higher oxygen and gas barrier properties are suitable for vacuum coffee packs, dry pastas and ready-to-drink beverages.
The biaxially oriented PET market in Latin America, which currently is estimated to amount to 176 million pounds per year, can expect median annual growth of around 5 percent annually, according to the company.
It was only last year that Polo expanded its Montenegro plant's BOPP capacity from just short of 40 million pounds to 110 million pounds with the addition of its second line. The firm claims to be the region's only producer to offer film manufactured using both the tenter and balanced process technologies.
Polo aims to raise its overall output to 220 million pounds per year by 2008. That, it stated, should deliver annual sales of around $248 million. The firm currently holds a domestic market share of 35-40 percent, according to its commercial director Davide Botton.
The company, part of Brazilian polymers producer Unigel Química SA, also is considering investing a further $10 million to set up a pilot production unit to develop new BOPP and other film products.
``The plastics converting sector is growing at twice to three times more than [Brazil's] GDP,'' according to Jorge Cardoso, Polo's managing director. The Brazilian domestic market is growing this year at a rate between 8 and 10 percent over last year, when BOPP film consumption stood at about 220 million pounds, he said.
Polo exports to 20 countries, despite the strength of the Brazilian currency against the dollar. The firm aims to maintain an average export share of its total business at no less than 35 percent, according to Cardoso.
Unigel Química has annual sales of nearly $1 billion and employs 2,000. Its subsidiaries make styrene, acrylonitrile, acrylates and methacrylates as well as polycarbonate, acrylic sheet and PET bottles.